Allocation of Expenditures in Elderly Households and the Cost of Widowhood

Daniel Burkhard ()
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Daniel Burkhard: University of Bern

Swiss Journal of Economics and Statistics, 2017, vol. 153, issue 4, 371-401

Abstract: Summary Widowhood and retirement change the economie environment of elderly households. While retirement changes income and expenditure patterns, widowhood fundamentally changes the structure of the household. Besides high non-monetary cost of losing the partner, resources are no longer shared and economies of scale arising from joint consumption are lost. This paper applies a collective household model to expenditure data on elderly households in Switzerland. The findings suggest that 44% of household resources are assigned to wives and both spouses save roughly 27% or, on average, 800 Swiss Francs on monthly expenditures relative to living apart. Estimates of indifference scales indicate that men suffer a financial loss after losing their wife, while widowed women do not.

Keywords: Jel-Classification; D12; D13; C30; Collective household model; indifference scale; resource shares; economies of scale in consumption; Engel curves; elderly households (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (1)

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DOI: 10.1007/BF03399512

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